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Adidas has decided to sell some of the trainers and other products it made with rapper Kanye West and donate some of the proceeds to charity.

The German sportswear giant cut ties with the celebrity, now known as Ye, last year after he made anti-Semitic comments.

The decision has cost the firm millions in sales and has it facing its first annual loss in more than three decades.

Shoes from the collaboration remain wildly popular in the resale market.

Chief executive Bjoern Gulden said the company was still working out how the sales would happen.

"What we are trying to do now over time is to sell some of this merchandise... burning the goods would not be a solution," he said at the company's annual shareholder meeting.

Adidas has about 1.2bn euros (£1bn; $1.3bn) worth of Yeezy shoes sitting in storage.

Mr Gulden said the firm had decided to sell some of the merchandise, instead of donating it, because it did not want to see the products reach the market indirectly.

Last week, Adidas said that if it decided not to "repurpose" its remaining unsold Yeezy stock, it would hurt its operating profit by €500m this year.

A sale could help reduce some of those losses. Ye will also be entitled to some of the money, under the terms of the partnership.

Shares in Adidas were up 2% following the meeting.

The company is being sued by investors who claim Adidas knew about Kanye West's problematic behaviour years before it ended their partnership.

Investors allege Adidas failed to limit financial losses and take precautionary measures to minimise their exposure.

Mr Gulden defended Adidas' years-long collaboration with the designer and musician, saying that "as difficult as he was, he is perhaps the most creative mind in our industry".

The company said it had concluded an internal investigation into reports that the artist had created a "toxic" environment.

It said the review had not substantiated all allegations of misconduct but that "erratic" behaviour had created challenges. It said that the firm was putting in place changes to prevent such problems from happening in the future.